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S&P 500 ends at record high after Fed projects stronger economy

EconomyMar 17, 2021 04:30PM ET
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© Reuters. The front facade of the NYSE is seen in New York

By Noel Randewich

(Reuters) - The S&P 500 and Dow Jones Industrial Average closed at record highs on Wednesday after the Fed predicted a fast economic recovery from the coronavirus pandemic and said it would maintain its interest rate at close to zero.

In its statement following its two-day policy meeting, the Federal Reserve projected a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down, and repeated its pledge to keep its target interest rate near zero for years to come.

Wall Street extended gains after Fed Chair Jerome Powell said during a news conference that it is too early to discuss tapering-off measures to support the struggling economy.

"The Fed statement today was more optimistic than some expected, they raised their outlook for both economic growth and the labor market. The market’s view of the statement is that it was fairly optimistic," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

A $1.9 trillion spending stimulus and the rollout of vaccines have fueled a rotation into so-called value stocks that are viewed as likely to outperform as the economy recovers from the coronavirus pandemic.

At the same time, worries that the stimulus could overheat the economy and lead to higher inflation rates have triggered a strong rise in long-duration Treasury yields and made technology and other growth stocks less attractive.

Following the Fed's statement, the yield on 10-year Treasuries ticked lower to 1.6374%.

The Dow Jones Industrial Average rose 0.58% to end at 33,015.37 points, while the S&P 500 gained 0.29% to 3,974.12.

The Nasdaq Composite climbed 0.4% to 13,525.20.

The Nasdaq remains down about 4% from its Feb. 12 record-high close.

Amazon.com Inc (NASDAQ:AMZN) rose 1.4% and Tesla (NASDAQ:TSLA) Inc added 3.7%, with the two companies giving the greatest lift to the S&P 500.

Six out of 11 S&P 500 sector indexes rose, with industrials and consumer discretionary the strongest performers and both up over 1%.

Fast-food retailer McDonald's Corp (NYSE:MCD) gained 1.9% after Deutsche Bank (DE:DBKGn) raised its target price on the stock and also upgraded its recommendation to "buy" from "hold."

Advancing issues outnumbered declining ones on the NYSE by a 1.33-to-1 ratio; on Nasdaq, a 1.46-to-1 ratio favored advancers.

The S&P 500 posted 44 new 52-week highs and no new lows; the Nasdaq Composite recorded 124 new highs and 18 new lows.

Volume on U.S. exchanges was 11.9 billion shares, compared with the 14.2 billion average for the full session over the last 20 trading days.

S&P 500 ends at record high after Fed projects stronger economy
 

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Comments (11)
George Pichurov
George Pichurov Mar 17, 2021 7:14PM ET
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From the first 10 lines: "Fed predicted a fast economic recovery... Federal Reserve projected a rapid jump in U.S. economic growth... Jerome Powell said that it is too early to discuss tapering-off measures to support the struggling economy." All fits.
Jeffrey Vose
Jeffrey Vose Mar 17, 2021 3:12PM ET
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Gonna be a lot of angry bears. Just get on the pyramid scheme with us and enjoy the ride!
George Pichurov
George Pichurov Mar 17, 2021 3:03PM ET
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Long live the FED. Oh, but what happened to capitalism btw.?
Vv Pp
Vv Pp Mar 17, 2021 3:03PM ET
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This is the masterpiece of capitalism! Rich get richer, poor are doomed... enjoy!!
Amine Fourali
Amine Fourali Mar 17, 2021 2:42PM ET
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Nothing new....
Stan Smith
Stan Smith Mar 17, 2021 1:19PM ET
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'a blowout GDP forecast for 2021' looks like its already decided. Its not your intention to pump stocks is it??
The Great
The Great Mar 17, 2021 1:10PM ET
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https://www.federalreserve.gov/live-broadcast.htm
Ricardo Tardelli
Ricardo Tardelli Mar 17, 2021 12:49PM ET
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FED is looking to drag it's markets down by 4/5%. Why would they come to be reasonnable once in a time ? Excess are King in these times. Will see ? Only a fool or the FED can buy at such levels.
Safil Patwary
Safil Patwary Mar 17, 2021 12:45PM ET
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FED is looking to drag it's markets down by 4/5% based on the economics data from the previous weeks. Take care.
Safil Patwary
Safil Patwary Mar 17, 2021 12:45PM ET
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I forgot to mention a healthy correction would be somewhere around 6/7% drop before some news are released of the hospitality sector gaining traction through the lockdown ease. Before dropping it a little further. I'd say that would be a healthy correction. Bit by bit.
perplexed76 .
perplexed76 . Mar 17, 2021 12:13PM ET
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FED is predictable, what about new lockdowns in Europe?
Earl Bond
Earl Bond Mar 17, 2021 12:13PM ET
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I live in Europe. It's an over reaction here. There's a max 30 day lockdown and the vaccines start to lower the curves. So much over reaction.
Благојче Наумовски
Благојче Наумовски Mar 17, 2021 12:13PM ET
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I am curious how do you come to the conclusion that the FED is predictable? I am not attacking you dont get me wrong i am just curious if you could help me understand ?
manoj kapale
manoj kapale Mar 17, 2021 12:13PM ET
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FED is predictable they print money when market is going to fall
Ricardo Tardelli
Ricardo Tardelli Mar 17, 2021 12:11PM ET
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If the FED was independant, you could expect an health correction. Don't you know that Jerome Power has 55 millions in financial asset wealth ? Do you believe in the concept of 'Unlimited Greed' ?
Tarang Shah
Tarang Shah Mar 17, 2021 11:20AM ET
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US Markets may fall by 2-3% today itself post Fed and US 10Y will climb above 1.7. be cautious
Matt Kay
Matt Kay Mar 17, 2021 11:20AM ET
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Sell strangles
 
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